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The global enterprise A2P SMS market size was USD 44.96 billion in 2020. The impact of COVID-19 has been unprecedented and staggering, with enterprise A2P SMS witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the market will exhibit a significant growth of 3.9% in 2020 as compared to year-on-year growth during 2017-2019. The market is projected to grow from USD 46.81 billion in 2021 to USD 64.24 billion in 2028 at a CAGR of 4.6% in the 2021-2028 period. The steady rise in CAGR is attributable to this market’s demand and growth rate returning to pre-pandemic levels once the pandemic is over.
Enterprise A2P SMS is a process of sending messages to customers through applications over mobile phones. The growing adoption of mobiles and smartphones is likely to drive market growth. The industries are highly investing in A2P messaging owing to the increasing competition amongst businesses. The increasing focus on customer engagement and acquisition is expected to boost the global market size.
Sudden Announcement of Lockdown Boosted the Adoption of Enterprise A2P SMS amid the COVID-19 Pandemic
The coronavirus pandemic has had extreme impacts on customer behavior and supply chain services. This has severely impacted service industries such as retail and e-commerce, media and entertainment, BFSI, and others. The shift from traditional business models to online platforms has resulted in the need for more efficient communication and customer engagement services. Thus, the demand for this enterprise SMS grew during the pandemic. For instance, in March 2020, Twilio A2P messaging service provider reported a 90% rise in demand for its platform from the healthcare industry owing to COVID-19. Further, with the disruption in the supply chain, enterprises across the globe are witnessing a sudden surge in customer queries. As more people have adopted online platforms, the trend of notifications, transactions, and alerts traffic increased. This has pushed the market players to invest in services dedicated to the COVID-19 crisis. For instance, to provide support to the healthcare industry, Tyntec, in partnership with the German Red Cross, announced the launch of new chatbots services over WhatsApp applications. This fueled the demand for A2P SMS across industries during the COVID-19 crisis.
Further, the rise in mobile marketing and advertisements during the pandemic has surged the adoption of A2E messaging services. During the pandemic crisis, A2P SMS services helped industries to engage customers and boost sales. Post-pandemic, the market is expected to show significant growth during the forecast period.
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OTT Platforms to Provide Growth Opportunities for Enterprise A2P SMS
The rapid adoption of smartphone and internet services is boosting the OTT (over the top) messaging platforms such as WhatsApp, Facebook Messenger, and iMessage, among others. The OTT messaging platforms further provide the facility of sharing rich communication services such as images, videos, sound clips, emoji, and stickers. This helps in engaging customers over messages. The significant adoption of OTT platforms has surged the market potential for A2P messaging.
The OTT platforms offer authentication facilities that help in confirming user identity during signups. Various industries require authentications for confirming orders, providing timely notifications, confirming the delivery of orders, etc. OTT-based A2P SMS helps these industries work more efficiently. For instance, the ticket booking service provider RedBus uses WhatsApp A2P messaging platform to send a confirmed ticket to passengers. Along with that, the provider also offers facilities such as booking cancellation, refund status, live bus location, bus reviews, and offers. Thus, OTT messaging platform is likely to boost market opportunities.
Cost-Effectiveness and Higher Reaching Capabilities of A2P SMS to Drive Growth
Enterprises have been using email services as a formal platform for communicating with clients over the years. However, the response to emails and its opening rates are lowering year-on-year. Further, most of the promotional and marketing emails end up in trash and spam folders. Conversely, the case is exactly the opposite for text messages. As per Gartner, text messages report a 45% response rate and a 98% open rate compared to email. Thus, considering the higher reaching capabilities of text messages, the adoption of this type of enterprise SMS in industries is growing rapidly. Also, the cost associated with A2P SMS is very low compared to other mediums. Therefore, small enterprises and start-ups are rapidly adopting A2P messaging services for creating brand awareness and enhancing customer experience.
Growing Security Threats to Hamper the Market
The market is expected to grow significantly across industries over the forecast period. However, the increasing number of privacy and security threats is likely to hamper market growth during the forecast period. One of the prominent threats faced by the industries is the grey route threat. As per the report by Mobilesquared, a loss of USD 5.76 billion was experienced due to the grey route in 2018. Similarly, traffic blending is also creating challenges for the service providers. Various companies even with installed firewall solutions witnessed traffic blending issues. This is likely to hinder the enterprise A2P SMS market growth.
Easy Integration of Services to Drive Cloud-Based A2P Messaging
Based on deployment, the market is bifurcated into cloud and on-premises. The cloud segment is expected to showcase rapid growth and dominate the market with maximum share. The cloud-based A2P messaging services offer a highly engaging and integrated marketing campaign that supports enhancing customer engagement. Also, cloud-based enterprise platforms seamlessly, integrate SMS, MMS, voice, and other services to provide a secure mobile messaging experience. This is driving the demand for cloud-based enterprise A2P SMS.
The adoption of on-premises solutions and services is low compared to cloud-based and is majorly adopted by large enterprises as it offers in-house data security.
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Rising Demand for Enhanced Customer Relationship Management to Fuel Market Growth
Based on application, the market is categorized into pushed content services, customer relationship management services, promotion and marketing, interactive services, and others (information services, workforce management, etc.).
The customer relationship management services segment is expected to lead this segment type during the forecast period. Growing industries, such as BFSI and retail & e-commerce, are adopting A2P SMS for customer relationship management.
The promotion and marketing segment is expected to gain rapid growth during the forecast period. Growing businesses and start-ups are focusing on promotions and marketing by sending application-to-person messages. This helps in targeting bulk customer-base with cost-effective strategies.
Similarly, pushed content services and interactive services are likely to grow steadily owing to the increasing focus on enhanced customer engagement.
Surge in Online Shopping Trend to Lift Retail and E-commerce Growth
Based on the end user, the market is categorized into BFSI, retail and e-commerce, travel and hospitality, healthcare, media and entertainment, and others (hyperlocal businesses, etc.).
BFSI is expected to dominate the segment share during the forecast period. The growing online services and payment transactions are boosting the adoption of A2P SMS in the BFSI industry. Banks and financial institutions are using the application-to-person SMS services for payment reminders, providing one-time passwords, balance statements, anti-fraud alerts, and others.
The retail and e-commerce segment is expected to gain rapid growth during the forecast period owing to the increasing competition. Large and small retailers are investing in A2P messaging to create brand awareness and provide customer engagement services. The growing adoption of online shopping is expected to fuel market growth.
Similarly, the growing demand for mobile health services is significantly driving the demand for enterprise A2P SMS in the healthcare industry.
The media and entertainment industry is estimated to witness steady growth during the forecast period. In the entertainment industry, various voting-based reality shows adopt A2P SMS to reach maximum customers. This is driving the growth opportunities of the market.
Asia Pacific Enterprise A2P SMS Market Size, 2020 (USD Billion)
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By region, the market has been analyzed across five major regions, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
Asia Pacific is expected to gain maximum revenue share during the forecast period. The increasing adoption of mobile phones and growing internet subscribers in the region are driving the market opportunities. China and India have a vast and distributed customer base, which is driving the demand for enterprise A2P SMS services to engage customers. The telecom industry and mobile operators are rapidly growing in the region. This is likely to boost the market growth in the region.
Europe is expected to gain rapid growth during the forecast period. Prominent industries in the region, such as BFSI, healthcare, retail, and e-commerce, and others, are driving the demand for A2P messaging solutions to manage a vast customer base. Further, the upcoming or emerging businesses in the region are adopting A2P SMS services to increase the brand awareness of their business. This is likely to drive the demand for enterprise A2P SMS in Europe.
North America is set to gain significant growth during the forecast period owing to the factors such as the growing preference for digital advertising, a surge in the number of internet subscribers, and growing adoption of advanced technologies such as the Internet of Things (IoT). Rapidly expanding startups and small enterprises in the region are adopting A2P SMS to create awareness and manage the customer base.
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The Middle East and Africa region is projected to gain steady growth owing to the increasing collaborations between network operators and A2P messaging providers. Similarly, Latin America is expected to showcase potential opportunities for market expansion. For instance, in December 2020, Brazil-based Sparkle and TIM Group collaborated to offer solutions for protecting A2P SMS from fraudulent routing and illicit bypass attempts. This is likely to drive this market.
Prominent Players Are Aiming for Strategic Partnership to Expand Business Presence
Key players, such as Orange Business Services, Global Message Services, Infobip Ltd, Smsglobal, Tyntec Group Limited, Vodafone Group Plc, Genesys Telecommunications, Mitto, CLX Communications AB, and others are entering into strategic partnerships and collaboration to boost business expertise and opportunity. The companies are also collaborating with network operators to provide customer engagement solutions for enterprises. These players are investing in advanced messaging solutions to support with uninterrupted delivery of messages.
May 2019 – Global Message Services (GMS) announced a partnership with Emirates Integrated Telecommunications Company (EITC), a mobile operator in UAE. Under this partnership, GMS will be providing an international Application-to-Person (A2P) messaging hub and managed services to UAE’s Du.
January 2021 – Mitto announced a partnership with all four mobile network operators in Tajikistan for A2P SMS. Through the partnership, the company is offering reliable A2P messages for the industries such as logistics, commerce, entertainment, and social media players, to enhance customer engagement.
An Infographic Representation of Enterprise A2P SMS Market
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The enterprise A2P SMS market research report highlights leading regions across the world to offer a better understanding to the user. Furthermore, the report provides market insights into the latest industry growth trends and analyzes technologies that are being deployed at a rapid pace at the global level. It further offers some of the drivers and restraints helping the reader to gain in-depth knowledge about the market.
Value (USD Billion)
Deployment; Application; End User; and Region
By End User
According to Fortune Business Insights, the global market size is expected to reach USD 64.24 billion by 2028.
In 2020, the market value stood at USD 44.96 billion.
The market is projected to grow at a CAGR of 4.6% during the forecast period.
The BFSI segment is expected to be the leading segment in the market.
Cost-effectiveness and higher reaching capabilities are the key factors driving the market growth.
Orange Business Services, Global Message Services, Infobip Ltd, Smsglobal, Tyntec Group Limited, Vodafone Group Plc, Genesys Telecommunications, Mitto, and CLX Communications AB, among others, are the top players in the market.
Asia Pacific region is expected to hold the highest market share.
Europe is expected to grow at the highest CAGR during the forecast period.
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